Local School Districts, KCTCS Technical Colleges & TRS Participating State Agencies

When returning to work with local school districts, KCTCS technical colleges or most state agencies, retirees can choose from one of several options. Each option requires the retiree and the employer to understand the requirements of KRS 161.605 as well as the administrative rules of TRS. Under no circumstance may a TRS retiree go into a Kentucky school to do work of any kind unless first reported to TRS by the employer.

Reminder to Retirees

If you will provide services for any TRS employer and your employer will not be making TRS contributions on your earnings, then you (the retiree) must have the TRS employer obtain an exemption from TRS using Form 30-E, “Request for Exemption from TRS Re-employment Limitations,” before you begin work at a TRS employer — even if you are, or would be, working for a contractor. All TRS employers must obtain an exemption for retirees coming into their district before the retiree begins providing services unless they withhold TRS contributions from the retiree’s compensation. TRS retirees are responsible for having an approved TRS exemption in hand before beginning services.

This form must be completed annually, meaning a new exemption is required each year for all services the retiree is providing in which TRS contributions are not withheld.

Returning to Work in a TRS Position question-and-answer handout

Other Reminders When Returning to Work

Retired members returning to work and starting a new retirement account will not be entitled to a second set of benefits for medical insurance, life insurance or an adult handicapped child; nor will they be eligible for disability retirement or survivorship benefits with this new account. Members cannot purchase any service credit in the new account that they would have been eligible to purchase prior to the initial retirement. New accounts are administered independently from, and have no reciprocal relationship with, the first account.

All TRS retirees are reminded that when they return to active employment and are eligible for medical insurance coverage through the Kentucky Employees’ Health Plan, administered by the Kentucky Personnel Cabinet, they are required to waive TRS medical insurance coverage. Termination of the active employment is considered a qualifying event that permits the member to enroll once again through TRS for medical insurance. It is advisable to contact TRS six weeks before termination of employment to set up your TRS health insurance.

The number of days that can be worked:

  • Part-time is 69 percent of the days in the full-time contract of the new position. Members must also adhere to a daily wage threshold and have a three-month break in service.  
  • Full-time is between 70 and 100 percent of the full-time days for the new position. Health insurance is no longer available through TRS and must be found elsewhere. The daily wage threshold applies as well as the break in service.
  • Chart of non-university return-to-work options

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Returning to Work in a TRS Position & Your Second Retirement Account

If you return to work in the part-time, full-time or critical shortage programs, you will start contributing to a second retirement account. After earning five years of service credit, you may retire this account and receive another lifetime annuity.

If you terminate your employment before earning five years of service credit, you may apply for a refund of your account. Account refunds may be rolled over to another qualified retirement savings plan or paid to you. You may call for a refund application at 800-618-1687.

The Importance of Your Daily Wage Threshold

Your daily wage threshold is the maximum daily rate of pay that you may earn for a full day of work in either the part-time or full-time return-to-work program. It is your responsibility to see that each of your TRS employers is aware of your threshold.

TRS will send you a letter with your daily wage threshold when you retire and at the end of each school year thereafter. Summer school or after school work can often cause a threshold violation. Earnings in excess of your threshold will result in a fine that may reduce your TRS annuity payments.

Your daily threshold is calculated as a percentage of your last daily rate before retirement. If you retired before Aug. 1, 2002, your threshold is 75 percent of your last daily rate. If you retired on or after Aug. 1, 2002, with less than 30 years of service, your threshold is 65 percent of your last daily rate. If you retired on or after Aug. 1, 2002, with 30 years of service or more, your threshold is 75 percent of your last daily rate.

If you have been retired for at least one year, your threshold may be indexed (increased) by the consumer price index (CPI) each year, if the CPI is above zero percent.

Your daily wage threshold cannot be less than $170 a day.

Calculating the Hourly Wage Threshold

The hourly wage threshold is calculated by dividing the daily wage threshold by the number of hours a full-time teacher must be on the job. The hours in a full day begin at the time a teacher must be in the building until the earliest they may leave after school. A day is usually between seven and eight hours long. A retiree who only works part of the day, for example 3.5 of the seven hours, can only earn part of the daily threshold. Therefore it is important to calculate the retiree’s hourly wage threshold to determine what they can be paid for the time worked.

Requirements for Breaks in Service

New retirees must experience a complete break in service before returning to work in a TRS position. If you return to work on a part-time or substitute basis you must experience a complete three-month break. Part-time and substitute employment is defined as employment for less than seven-tenths (0.70) of the contract days in the position in which you are being re-employed.

If you return to work on a full-time basis with the same employer from which you retired, you must have a complete one-year break in service. If you return to work full-time with a different employer than from which you retired, you must have a complete three-month break in service. Full-time employment is defined as employment equal to or greater than seven-tenths (0.70) of the contract days in the position in which you are being re-employed.

It is very important that any TRS retiree who has questions about the break-in service-requirements and/or the daily wage threshold contact TRS before returning to covered employment. Failure to comply with these mandatory return-to-work provisions has serious consequences, including the voiding of the member’s retirement and the required return of all benefits paid by TRS to the retiree.

Alternative Breaks in Service

You may return to work after only a two-month break in service under certain circumstances. This opportunity requires that you forfeit your retirement allowance for the remainder of the required standard break in service.

For example, if you return to work part time (or full time for a TRS employer other than the one from which you retired), you must experience a complete two-month break in service and then forfeit your retirement allowance for the remaining month of the standard break in service.

If you return to work full-time for the same TRS employer from which you retired, you must experience a complete two-month break in service and then forfeit your retirement allowance for the remaining 10 months of the standard break in service. If you experienced a six-month break in service, then you would be required to forfeit your retirement allowance for the remaining six months of the standard break in service.

The required minimum break in service will never be less than two complete months.

Returning to Work and Waiving Your Retirement Annuity

If you retire from service, you may elect to waive your annuity and return to full-time employment in a Kentucky public school or state agency covered by TRS without limitations on a break in service, the number of days you may work or on the compensation you may earn. Form 29 is used for this option. Returning to work by waiving your current annuity can potentially increase your annuity when you cease your post-retirement employment. This is the primary reason retirees choose this option when returning to work. When waiving, you do not receive annuity payments or cost-of-living increases. You also must waive your TRS medical insurance.

During the period you waive your retirement allowance, TRS contributions will be deducted from your salary by your employer. If you remain on waiver less than one full contract year, your contributions will be refunded at the end of the waiver period. If you remain on waiver for at least one full contract year, upon cessation of employment your annuity will be recalculated using the additional service credit and salaries you earned during the waiver period (if those salaries are higher than the salaries that you earned prior to your initial retirement). Discounts that were applied during your initial retirement may also be reduced or eliminated depending on how many years you return to work on waiver. Recalculations do not incorporate cost-of-living adjustments assigned to your annuity prior to your return to work on waiver.

You may return to the retirement payroll upon verification by your employer that your employment has been terminated. This must be done on the prescribed TRS form. A member retired for service who has been employed for at least 25 days during a school year may waive his or her retirement annuity and return to covered employment during that school year no more than one time during any five-year period.

After reretiring and resuming your annuity payments, a break in service is required if you wish to go back to work again for a TRS employer. If you want to exercise a retirement waiver, you may call TRS for a waiver application form or a download the form at Forms for Retired Members. If you have any questions concerning any employment after retirement, you should contact TRS.

Returning to Work Without Waiving Your Retirement Annuity

There are opportunities for TRS retirees to return to work in part-time and full-time positions while continuing to draw their retirement allowance. Under these return-to-work provisions, members make contributions to TRS and start a second retirement account. If you returned to work under these provisions prior to July 1, 2008, and earn at least five full years of service credit in the new account, you will be entitled to a second retirement allowance. Members who earn less than 10 years of service credit in their new account will be entitled to a retirement allowance of 2 percent of their high-five final average salary for each year of service. Members who earn at least 10 years of service credit in their new account will be entitled to a retirement allowance of 2.5 percent of their high-5 final average salary for each year of service. Service credit is determined by dividing the number of days worked by the number of days in the full year’s contract (minimum of 185 days).

If you returned to work under these provisions after July 1, 2008, and earn at least five full years of service credit, you will be entitled to a second retirement allowance at age 60. Members who have at least 10 years of service credit in their second retirement account will be entitled to a retirement allowance at 55.  If you retire your return to work account with less than 10 years of service you are entitled to a retirement allowance of 1.7 percent of your high-five final average salary for each year of service. Members who earn at least 10 years of service credit in their second retirement account will be entitled to a retirement allowance of 2 percent of their high-five final average salary for each year of service. Service credit is determined by dividing the number of days worked by the number of days in the full year’s contract (minimum of 185 days).

Returning to Work Part Time in a TRS-Covered Position

You may return to part-time employment in a TRS position by fulfilling a complete three-month break in service from your last day of duties prior to retiring. A limitation on the number of days you may work and the salary you earn exists. The number of days employed is limited to less than 70 percent of the contract days a full-time person is required to work in the position you are being employed. For a quick calculation, multiply the contract days required by the full-time employee by 69 percent. The salary you may earn is limited to your daily wage threshold; see “The Importance of Your Daily Wage Threshold” for more information.

You are contributing to a second retirement account while continuing to receive your retirement check. You may retire your second retirement account after earning a minimum of five years of service credit and can begin receiving a second annuity.

Returning to Work Full Time in a TRS-Covered Position

You may return to full-time employment in a TRS position with a different employer from which you retired after fulfilling a complete three-month break in service from your last day of duties prior to retiring. If you wish to return to the same employer from which you retired, you must fulfill a complete one-year break in service from your last day of duties prior to retiring. Your salary is limited to your daily wage threshold, which is obtained from TRS. Participation in this program must be approved by TRS prior to your employment beginning.

KRS 161.605 requires that re-employment of retired TRS members in a full-time teaching or non-teaching position in a local school district or agency shall be permitted only if the employer certifies to TRS that there are no other qualified applicants available to fill the teaching or non-teaching position.  The employer may use any source considered reliable including, but not limited to, data provided by the Education Professional Standards Board and the Department of Education to determine whether other qualified applicants are available to fill the position. The superintendent of the school district or agency head must assure TRS that every reasonable effort has been made to recruit other qualified applicants for the position on an annual basis.

See “Returning to Work Without Waiving Your Annuity” for more information.

Returning to Work in a Critical Shortage Position

Effective July 1, 2004, a local school district may employ retired members in a limited number of full-time or part-time teaching or administrative positions in which the daily wage threshold will not apply. These positions are called critical shortage. Prior to employment in a critical shortage position, the local school superintendent must certify on Form RET-FT that no other qualified applicants are available for the position. Final approval must be made by TRS before employment. These forms must be sent in each fiscal year and the approval or rejection will be returned to the employer.

KRS 161.605 requires that re-employment of retired TRS members in a full-time teaching or non-teaching position in a local school district or agency shall be permitted only if the employer certifies to TRS that there are no other qualified applicants available to fill the teaching or non-teaching position.  The employer may use any source considered reliable including, but not limited to, data provided by the Education Professional Standards Board and the Department of Education to determine whether other qualified applicants are available to fill the position. The superintendent of the school district or agency head must assure TRS that every reasonable effort has been made to recruit other qualified applicants for the position on an annual basis.

Retired members returning to work in a critical shortage position will start or continue a second retirement account with TRS that, if they vest, will pay a second retirement allowance under conditions similar to the standard return-to-work provisions.

Retirees may return to either part-time or full-time Critical Shortage employment in a TRS position after fulfilling the necessary break in service. A complete three-month break in service from the last day of duties prior to retiring is required for part-time employment with any TRS employer or for full-time employment with a different TRS employer from which you retired. A complete 12-month break in service from the last day of duties prior to retiring is required for full-time employment with the same employer from which a retiree retired. The new salary is not limited to a daily wage threshold. If employed part-time, the number of days the retiree is permitted to work is limited to less than 70 percentof the number of days a full-time person is required to work in the same position.

Returning to Work in a Non-TRS Position

Retired members who wish to return to employment with TRS employers in positions that do not qualify for TRS membership may do so. Prior to the retiree’s employment in a non-TRS position, the employer must submit a Form 30-E, “Request for Exemption from TRS Employment Limitations.” TRS will notify the employer and the retired member whether the TRS return-to-work limitations apply. Failure by the employer to submit the Form 30-E and obtain a written determination by TRS will cause the retiree to be in violation of the return-to-work provisions.